Intel Stock Gets a Boost From Trump Meeting. It Needs More for a Real Turnaround.

Intel has lost market share in advanced chip manufacturing to Taiwan Semiconductor Manufacturing. (Photo by I-HWA CHENG/AFP via Getty Images)

Intel stock was rising again Tuesday as shareholders reacted to CEO Lip-Bu Tan’s meeting with President Donald Trump.

Friendly words are a good start, but the semiconductor company still has a long way to go to show it can reclaim chip leadership.

Intel shares were up 2% at $21.08 in early trading. That’s set to add to a 3.5% gain the previous day as Tan’s meeting with Trump on Monday appeared to defuse the president’s previous call for the CEO’s resignation and set up another meeting next week.

Tan looks to be out of the firing line for now, but the real prize from talks at the White House would be to convince the president he should place Intel at the center of his plans to revive domestic chip manufacturing, as an alternative to Taiwan Semiconductor Manufacturing .

Tan is in favor of maintaining Intel’s chip-manufacturing business within the company—as opposed to spinning it into a separate business— according to The Wall Street Journal, which cited people familiar with the matter. However, the company desperately needs the validation of a major external customer choosing to manufacture semiconductors using either its newest 18A process or its future 14A process.

Trump could signal his support for Tan’s plans in various ways. One would be to push back against Republican Sen. Bernie Moreno, who has criticized Intel for delays to its $28 billion semiconductor project in Ohio and called for Tan to resign.

A more radical option would be for the White House to put pressure on some of Intel’s prospective chip-manufacturing customers to commit to using its plants.

Writing in Fortune, former Intel CEO Craig Barrett this week argued that eight U.S. customers, including Nvidia , Apple , and Alphabet’s Google, should invest $5 billion each in exchange for a stake in the chip company and guaranteed supply of semiconductors. But with Taiwan Semiconductor rapidly expanding its manufacturing capacity in Arizona, it seems unlikely such a coalition would form without political pressure.

Intel didn’t immediately respond to a request for comment early on Tuesday.

Write to Adam Clark at adam.clark@barrons.com